center. in today's cover story, why healthcare costs have increased in recent months. plus, it's been 4 years since the housing bubble burst - punishments for big banks may finally be around the corner. and, one of the richest men on wall street is trash-talking a taco stock. first business starts now. you're watching first business: financial news, analysis, and today's investment ideas. good morning. it's wednesday, october 3rd. i'm angela miles. in today's first look: the debate in denver. the first

presidential debate is tonight, and it's starting to take on the feel of a sporting event. ahead of the showdown, muted action from the market. the dow sold off 33 points, and small gains were made in the s&p 500 and nasdaq. gold and oil pulled back slightly. meg whiteman, the ceo of hewlett-packard, will hold her first analyst meeting today since taking the job last september. traders have become concerned about the the tech company's competitiveness in the consumer and corporate in spaces. let's get a jump on the trading day now with mark sebastian of option pit mentoring. good morning mark. > > morning. > > what is the market waiting for? i feel as though there's a holding pattern. is it the debate? is it the jobs number? what do you think? > > it's the jobs number. believe it or not, i don't think the market is paying too much attention to these debates. the adp number this morning i think is going to be important. even more so is non-farms. i think the non-farms on friday could have a lot more to do to

determine the election than any of the debates that are upcoming. > > google is going gaga. what do you think about this stock? > > you know, it's interesting. any time we see one of these big national headlines - "google eclipses microsoft in market cap" - you immediately see some selling pressure. i think we're going to see something similar. don't be surprised if we see a little bit of selling and profit-taking ahead of earnings. i'd wait 'til earnings, see what happens, and then look to jump in. long-term, google is a great stock. > > what about people who own microsoft? > > you know what, microsoft, this new product that they have coming out is supposedly pretty good, windows 8. it's not like microsoft has been a bad stock. it has a great dividend yield as well. i have no problem with microsoft. > > good to have you on the show this morning. that's mark sebastian of option pit mentoring. > > thank you. let the games begin. president obama and mitt romney head to the podium in denver tonight for round one of the debates. expect plenty of heated conversation on the economy. out of six 15-minute segments, 3 will focus on the nation's finances. the economy remains a top issue for voters. and many

americans are anticipating a victory from the president. pew research reports 51% of voters say they think obama will win in tonight's broadcast. an analyst with the sunlight foundation tells first business that the pressure is on for the romney campaign. "in the polls it looks like romney is falling behind and falling further behind in the battleground states. although nationally it's a very close election, he's been hammered in the battleground states. the debates can be a great equalizer for him, but also that increases the pressure on him, whereas i think we are going to see barack obama playing a lot more defense." that was bill allison of the sunlight foundation. at long last, a wall street firm is being sued for fraud in connection with the housing crash. the suit was filed monday by the new york attorney general. the lawsuit holds jp morgan chase responsible for action by wall street firm bear stearns, which it acquired in 2008. the sold bear stearns prior to the housing collapse from 2006-2007. the attorney general says investors lost $22.5 billion on mortgage-backed securties. "this the heart of what

inflated housing prices are about if you look at it - the insatiable need of these banks to get more and more mortgages no matter what quality, so they could package them and sell them, make money, and go back for more loans." the ag says the toxic mortgages were sold to individual investors as well as pension funds. americans lost retirement money and value in their homes. a jp morgan spokesman responds: "we're disappointed that the nyag decided to pursue its civil action without ever offering us an opportunity to rebut the claims and without developing a full record. "they knew that the system was dysfunctional; they really weren't checking on quality of loans effectively. eventually this conduct and conduct by this firm and others led to the collapse of the housing market and the crash which we are still paying for today."

critics question, what took so long to go after wall street? "this is just the beginning of the realization of the commitment the president made in january when he announced the formation of this working group. this is the first step. it's far from the last step." in this case, the attorney general is seeking investor damages and hopes to recoup losses. the senate is hatching a plan to avoid a looming fiscal fiasco becoming better known as "the fiscal cliff." the new york times says a group of bi- partisian lawmakers outlined a three-tiered plan to avoid automatic tax hikes set to go into effect in january. lawmakers must also lay the groundwork on a basic plan to reduce the federal deficit. the group will begin work on the plan following november's election and have until january to agree on a deal. senators could face some road blocks along the way. senate democrats say they do not agree with

extending bush-era tax cuts, while republicans oppose raising tax rates. a shocking stat is out about millionaires getting paid unemployment. according to the congressional research service, nearly 2400 millionaires were paid unemployment in 2009. add to that another 954,000 households earning more than $100,000 also taking home unemployment benefits. the numbers include people who were hired for higher-paying jobs after receiving the government money. in 2011, the senate voted unanimously to end unemployment payments to jobless millionaires. however, it was attached to another bill which is yet to pass in the senate. a bailout for spain is "not imminent." that's according to the country's prime minister, who told reporters yesterday that plans to request a bailout are not set in stone. stocks reacted negitively yesterday on the news. many investors have expected spain to request bailout money in order to push down its high borrowing costs. moodys will release a review of the country's sovereign debt this month. some are predicting spain's rating could be lowered

to "junk status." meanwhile, greece is running short on time. government officials held a new round of talks with foreign lenders. officials need to clinch a deal before meeting up with eurozone ministers next week. all greek citizens have been displaying their frustrations with severe cuts in salaries, pensions and benefits. european leaders still question whether the austerity measures will actually happen. there was some shine to auto sales in september. the big three u.s. automakers - ford, chrysler and gm - reported mixed but mostly upbeat sales in september on tuesday. chrysler was on top with a 12% uptick in september sales. sales came from new models, low interest rates and the improving u.s. economy. the car manufacturer reported sales of 142,000 vehicles, led by the dodge avenger midsize sedan. gm had a 1.5% increase, but truck sales fell 7.6%. ford sales slipped .1%. toyota sales in the u.s. rose over 40%. there's more trouble in the air

for american airlines. tuesday, a boeing 777 flying from chicago to london made two emergency landings, one in canada because of a medical emergency and other in ireland because a fan was giving off a smokey odor in the cabin. that's just the latest issue at the airline. american officials acknowledge that 8 of its boeing 757's are under inspection for loose seats. seats came loose on 3 flights in the past few days. the airline says the seat problem has nothing to do with unhappy employees. mark zuckerberg is attempting to make new inroads for facebook in russia. the facebook founder met with russia's prime minister, dmitry medvedev, to talk about expanding the social media network's presence there. russia is one of few countries where facebook isn't a major player. reportedly, russia is the largest internet market in europe. in case you are wondering, zuckerberg lost his hoodie and wore a formal suit to the meeting. kraft has officially split into two. kraft and its snack food spinoff, modelez international,

filed to trade as two separate public companies on tuesday. the north american grocery business will continue to carry the name kraft and include velveeta and miracle whip. tickers will change to "krft" from "kft." mondelez, which includes oreo and cadbury, will trade under mdlz. according to analysts, the split is more evidence that the ipo market is getting stronger. retailers are prepping for happy holidays. the national retail federation is expecting a bump in holiday shopping. the group predicts americans will spend 4.1%, not quite as high as last year's seasonal sales, but higher than the average 3.5% seen for the last 10 years. the news follows a solid back-to- school shopping season and reports of higher consumer confidence. retailers such as macy's and kohl's have been adding staff in preparation for the upcoming shopping season.

still to come, we'll hear why lately health insurance premiums have been having some nasty side effects. but first, the presidential debates kick off tonight. what can we expect from both sides of the stage? that's coming up next.

president barack obama and republican contender mitt romney go toe-to-toe and head- to-head in their first debate tonight. here to wiegh in on the issues, michael iannacone, who is with mdi investments, and

rebel cole, a finance professor at depaul university. welcome back to the show. > > thank you very much. > > tonight's debate will very much focus on the economy. who is the better man for the job? > > there is no better man for the job. mr. obama keeps focusing on that it's not his problem and he hasn't fixed it in 3 1/2 years, and mitt romney is protecting the really rich and the middle-class are being shafted. > > i will have to go with paul ryan, because he's the only one who has offered a comprehensive budget that would actually deal with the nation's problems. whether you agree or disagree with his plan, at least he's had the courage to step up and offer numbers. > > a new cnbc poll may surprise you. it reveals that 55% of americans say the economy is worse than it was four years ago. 22% say it's better, 17% it's about the same. but voters overwhelmingly chose president obama as the candidate that they would think could do a

better job of fixing the economy by a 9-point lead. > > i would agree that the economy really hasn't changed. the issues that we had four years ago are still there. we haven't found a way to fix those problems. and the economy is not growing. it's hard to believe that someone who has more than doubled the deficit is going to fix the problem by raising taxes and trying to flood the economy with programs is going to grow our economy. > > which segues to the next topic, which is taxes. at president obama, of course, is pushing for higher taxes for millionaires and billionaires, and mr. romney of course is against that idea. who will do a better job with the tax plan? > > i think you're going to see more of the same. but you can take 100% of all the income of everybody making over $250,000 and you're not going to make a real dent in the budget deficit. you've got to attack the entitlement programs: social security, medicare, and

medicaid. again, paul ryan is the only one who has offered any sort of a program. the president has been totally silent for three years. the democrats have not offered a budget since 2009. it's just shameful. > > healthcare is also on the agenda with the debate. do you think americans are confused about how healthcare actually works with the new reform? > > yes. i sure am. i run a small business, and we're confused as to how healthcare works. i would say over the past three years our premiums have gone up and our coverage has gone down. yes, we're now protected from pre-existing conditions, but, we have much higher deductibles, our premiums are much higher, and i'm getting lower service. > > the problem with obamacare is it was passed in 2009, but it doesn't fully phase in until 2014. this is insanity, because it created so much uncertainty that no small business, which is the engine of jobs growth, will hire anybody until they know what their cost structure is actually going to be like, and we are not going to know that for another year or two.

> > on the other hand, you have the big situation where people arrive at the hospital with an emergency and guess who ends up paying for it? michael iannacone, of mdi investments, and rebel cole, of depaul university. always good to have you guys on the show. thanks for coming in. > > you bet. > > thank you. there's more on healthcare still to come. insurance premiums are on the rise. we take you behind the numbers to find out why, right after the break.

ñçbñ annual premiums for families with employer-provided health

insurance are up $2300 since president obama took office. public health researchers say it reflects a cyclical upward trend that follows recession. but others say it is counter to what the president promised when he ran for office in 2008. in february 2008, then- presidential candidate barack obama vowed to lower premiums for family coverage by $2500 by the end of his first term as president. instead, it's gone up $2370 according to a survey by the kaiser family foundation. "we're slowly creeping out of recession and with that, premiums are going back up - 4% last year." but some say it's gone much higher. "15%, and i'm a small-business owner and i can't afford to pay health insurance for my employees right now." and in case you thought the healthcare debate was settled, it's not. only a portion of the

reforms have been implimented. in 2014, states are scheduled to expand medicaid and set up health insurance exchanges to help people choose a plan. however, what will be included in coverage, known as "essential standard benefits," is still open for debate. "i'm not talking about anything major like doctor visits. more ancillary things, such as will chiropractic need to be in the package." however noticable the rise in premiums, it wasn't that long ago when annual premiums jumped by double digits - 13% in 2002, for example. it seems healthcare is a work-in- progress, even for canadians whose system has long been seen as a model. "there's a movement in canada to allow people to buy private health coverage and each time, the feds say no." governor romney has vowed to repeal the health reforms. the

commonwealth fund, which researches health issues, says that could raise the number of americans without health coverage to 72 million people in the next decade. a hedge fund manager caused a tick-up in shares of a taco and burrito chain. david einhorn, president of hedge fund green light capital, is legendary on wall street for short-selling and known for triggering stock moves. at an investors' conference yesterday, eihhorn quipped that chipotle's biggest challenge is taco bell. taco bell recently launched a more upscale menu. while some disagree with einhorn's comments, chipotle stock rallied a couple of dollars. yum brands, which owns taco bell, gained 11 cents. coming up, the other stocks david einhorn is talking about, and is now the time to follow his lead? that's next in chart talk.

tim biggam of tradingblock joins us for chart talk. it's great to have you back on the show. it's been awhile. > > it has been. good to be back. thank you angie. > > let's start by talking about david einhorn. yesterday he was talking up and down a number of stocks. he talked up gm, cigna shares got a boost from his comments, and green mountain fell apart. what should investors do when, here's this big hedge fund guy out here talking up and down stocks? > > i think long-term investors absolutely kind of ignore, but for the short-term guys, obviously they hang on every word. and don't think that mr. einhorn may not be taking advantage of some of that tagalong selling or buying - depending on which side of the fence he is - to trim out some of the positions at a better price than he got into. so, he can move the markets, and the big boys absolutely occasionally will take advantage of the fact that they can move them their way.

> > i would love to get your thoughts on yahoo. here is a stock that has traded in a range now for a long time. is there any chance of a break-out or breakdown on this stock? > > i absolutely think with melissa mayer being in charge there, certainly she is there to run the company, not try to build it for a takeover possibility. although with the acquisitions google and everyone else is having, yahoo is getting a little bit of a lift just on the fact that the premiums and multiples are going up on these stocks. but i think going forward, this stock has some of its parts kind of modeled when you look at their big stake in alibaba. yahoo japan they're valuing. the rest of the company x cash at only about a dollar a share, so they're really saying that yahoo itself really is almost worth $0. but when you look, they do have, certainly, some trademark properties out there as well, so i like this stock from a value play, and i think if you're looking to kind of hide out in a stock shorter-term given the

market turmoil, yahoo, given the fact that it's kind of been mired here, certainly would be one of my picks going forward. > > what are you looking for here? a 5% gain? less than that? > > i think with yahoo it's not going to be the yahoo of old in the late 1990s, but i think going forward, it should be a slight market outperformer, given the fact that i think the market will have a little difficulty going forward here. kind of look for yahoo to maybe put in a 7-8% net return over the course of the year, and there is talk that they're going to start returning that cash as a dividend going forward as well. so that will give the stock a little bit of a boost going forward. > > not too shabby. that's tim biggam of tradingblock. thank you tim. > > you bet. thank you angie. that's a wrap on this wednesday. coming in up "movies and money" tomorrow, sony gets a one-two punch at the box office. the knock-out films that were big hits for the hollywood studio. thank you for joining us this morning. from all of us at first business, have a wonderful wednesday.

. another angry mother, a mother demands mothers about the shooting of her son. and children will be

walking to school instead, it is all ahead on the ktvu channel 2 morning news. good morning, i am pam cook, let's check in with he steve paulson, what is it going to be like today? >> well, temperatures could plunge 18 to 20 degrees near the coast, here is sal. we are talking about a chase on the freeway here and it is going on, on 880 southbound, i was trying to find it on my screens here so we will let you know if this actually gets out of hand, what happens with it and let's go to